D ec en t r al i s e d o p er at i o n s T h e K ey au d i t m at t er H ow t he m a t t e r wa s a ddr e s s e d i n o ur a udi t The G r oup c om p r i s e s m or e t ha n 150 s ub s i di a r i es a nd a s s o c i a t es c om ponen t s w hos e ope r a t i ons e xt e n d a cr o ss t he w or l d The G r oup s bus i nes s i s a na l y t i c a l t e s t i ng a nd t he i ndi v i dua l c om ponen t s a r e w i de r a ngi ng i n s i z e c us t o m er b a s e a nd t y pe of s er v i c e pr o v i ded The dec ent r a l i s ed a nd v a r i ed na t ur e of t hes e oper a t i on s r equi r e s i gni f i c a nt ov er s i ght b y t he G r oup t o m oni t or t he a c t i v i t i es r ev i ew c om ponen t f i na nc i a l r epor t i ng a nd u nder t a k e t he G r oup c ons ol i da t i on Thi s i s a n e x t ens i v e pr o c es s due t o t he hi gh num ber of a c c ount i n g s y s t e m s u s ed i n t he G r oup Thi s w a s a k e y a udi t m a t t er f or us gi v en t he l a r ge num ber of s ub s i di a r i es a nd a s s o c i a t e s a nd t h e hi gh num ber o f a c c ount i ng s y s t e m s w hi c h r e s ul t ed i n s i gni f i c a nt a udi t ef f or t b y u s W e f oc u s ed on U nder s t a ndi ng t he c o m pone nt s a nd i dent i f y i ng t h e si g n i f i can t r i sk s o f m a t e r i al m i sst at e m e n t w i t hi n t hem The s c opi ng of r el ev a nt pr o c edur es c on s ist e n t w i t h t he r i s k i dent i f i ed The a s s e s s m ent o f t he c om ponen t s c om pl i a nc e w i t h G r oup a c c o unt i ng pol i c i es The a s s e s s m ent o f t he r es ul t s of p r oc edu r es per f or m ed by c om ponen t a u di t t ea m s a nd The c ons ol i da t i on a nd r epor t i ng pr o ce ss O ur pr o c edur e s i nc l uded W e i ns t r u c t ed s el ec t ed c om ponent a udi t t ea m s t o per f or m pr o c edur e s on t he f i n a nc i a l i nf or m a t i on pr ep a r ed f or c on s ol i da t i on pur pos e s The s el ec t ed c om ponent s w e r e t hos e o f m o s t s i gni f i c a n c e t o t he a udi t o f t he G r oup ei t her by i ndi v i dua l s i z e or by r i s k t o th e G r oup pl us a s a m pl e on a r ot a t i on a l ba s i s o f t he r em a i ni ng c om ponen t s not m eet i ng t he s i z e a nd r i s k c r i t er i a The obj ec t i v e of t hi s a ppr o a c h w a s t o ga t her e v i d enc e on s i gni f i c a n t ba l a nc e s t ha t c ons ol i da t e t o f or m t he G r oup s f i na nc i a l r epo r t i ng T he c om ponen t a udi t t ea m s per f or m ed pr oc edur e s on t he f i na nc i a l i nf or m a t i on pr epa r ed f o r c ons ol i da t i on pur pos es W e w or k ed w i t h t he c om pone nt a udi t t ea m s t o under s t a nd t he c om ponen t s i dent i f y r i s k s s i gni f i c a nt t o t he a udi t of t h e G r oup a nd pl a n r e l e van t p r o c edur e s W e ev a l ua t ed t he w or k p er f or m ed b y t he c om ponent a udi t t e a m s f or our pur po s es W e di d t hi s by w or k i ng w i t h c om ponent a udi t t ea m s t o i dent i f y a nd a ddr es s m a t t er s a s t hey a r o s e dur i ng t he a udi t W e a l s o a s s e s s ed c om ponent a udi t t ea m s r ep or t i ng t o us on t he c om ponent s r e s ul t s a nd c o m pl i a nc e w i t h t he G r oup s a c c ount i ng pol i c i es W e di s c us s ed t he obs e r v a t i ons a nd f i ndi ngs f r om t he c o m ponent a udi t or s pr o c edur e s a nd i ns pec t ed s el ec t ed c om pon ent a udi t or s w or k pa per s W e t e s t ed t he f i na nc i a l d a t a u s ed i n t he c ons ol i da t i on p r oc e s s f o r c o ns i s t en c y w i t h t h e f i na nc i a l da t a a u di t ed by c om ponent a udi t t ea m s W e a l s o a s s e s s ed t he c ons ol i da t i on pr oc e s s f or c o m pl i a nc e w i t h a c c oun t i ng s t a nda r ds For t he ot her c o m ponent s not w i t hi n t he a bov e s c ope w e per f or m e d an al yt i cal p r o ce d u r e s t o deepen our under s t a n di ng of t hes e c om ponent s c or r obo r a t e our s c opi ng dec i s i ons a nd a na l y s e f i n a n c i a l i nf or m a t i on I n o u r an al yt i cal p r o ce d u r e s w e co m p ar e d a ct u al f i na nc i a l per f o r m a nc e t o t he pr i or y ea r r e s ul t s w e enqui r ed of G r oup a nd c o m ponent m a n a gem ent a nd c ons i der ed t he s e r e s ul t s a ga i ns t our e x pec t a t i ons 86 ALS LIMITED AND IT S SUBSIDIARIES A NNU AL F INANCIAL R EPOR T F OR THE Y EAR E NDED 31 M AR CH 2019 F INANCIAL REPOR T I NDEPENDENT A UDIT OR S REPOR T T O THE MEMBERS OF ALS L IMITED